A new practitioner’s perspective on Tax Court proceedings – lessons from a baptism of fire
27 October 2015
Posted by: Author: Darron West
Author: Darron West (Advocate)
Darron West recounts
his introduction to the Tax Court and shares practical insights from his
Despite considerable education in and exposure to tax law
itself, I only recently enjoyed my introduction to proceedings in the Tax
Court. While the necessary procedural
principles are set out in the Tax Court Rules promulgated under section 103 of
the Tax Administration Act 28 of 2011, other practitioners might value some of
the practical elements that I noted during my first experience. Certainly, these notes cannot and do not
presume to be exhaustive, and can serve only to highlight particular aspects.
The composition of the
It can be quite intimidating entering the courtroom for the
sitting of the Tax Court, particularly for the novice practitioner. While it
might be unnecessary to do so, for the sake of completeness I note that the Tax
Court comprises the judge of the High Court (sitting as the President of the
Tax Court), and two assessors (one assessor from commerce, and the other from
the accounting profession, although there are circumstances in which the
commercial member must have certain specialist credentials).
Courtroom etiquette prevails, which necessarily means that
everyone in the court stands when the judge and assessors enter the courtroom,
bows deferentially to the bench, and is seated only after the members of the
bench have been seated.
Since the President of the Tax Court is a judge of the High
Court, the mode of address is "my Lord” or "my Lady”. The convention is not to
refer to the judge as "you”; rather, the practitioner addressing the court
should replace the use of "you” with "your Lordship” or "your Ladyship”. For example,
instead of saying, "You will notice on page 57 of the dossier…”, you would
rather say, "Your Lordship will notice on page 57 of the dossier…”.
Also, if referring to an assessor or assessors, one should
demonstrate the appropriate respect by referring to "the learned
assessor”. For example, were an assessor
to address a question to the practitioner, the respectful response might be,
"Indeed, the learned assessor will find that reference on page 57 of the
It is also important to realise that the role of the assessors
is to assist the President of the Tax Court in evaluating the facts of the
case. Only the President of the Tax Court may make any decision regarding a
matter of law. It follows that if an exclusively legal point is being
argued, the assessors will be justifiably silent in those proceedings. So, when
arguing a legal point, you might enjoy the approving nods and smiles of the
assessors, but you should not misinterpret these as signals of the success of
The formalities aside, one's case is based largely on the
quality of the pleadings and so it is to this aspect that I now turn.
In a tax appeal, the substance of the respective cases are set
out in SARS’s Statement of Grounds of Assessment, and the taxpayer's Statement
of Grounds of Appeal.
That is not the end of it, however. In terms of rule 40 of the
Tax Court Rules, at least 30 days before the hearing of the appeal, SARS must
deliver a "dossier” to both the appellant taxpayer and the registrar of the Tax
Court. The contents of this dossier include the above statements, but also
include several other documents pertinent to the evidence in the proceedings.
In essence, the dossier amounts to an audit trail of the official
correspondence between SARS and the taxpayer (which includes inter alia the taxpayer's returns,
SARS’s notice of objection, the taxpayer's notice of appeal and minutes of the
Two important observations follow after considering the
contents of the dossier: first, the dossier does not necessarily contain all
of the documentary evidence to be led in the appeal, and secondly, the
importance of the pre-trial minutes cannot be underestimated.
As to the first point, there is scope for ample documentary
evidence to be tabled before the Tax Court even though such evidence is not
included in the dossier. Indeed, the number of such documents discovered as
part of the trial preparation process often far exceeds the content of the
dossier, and is included in the "trial bundle”. Hence, a practitioner
(especially a new practitioner) should not misconstrue the dossier as the sum
total of permissible documentary evidence.
As to the second point, the purpose of a pre-trial conference
is to at least attempt to limit the issues in dispute. Importantly, the Tax
Court takes into account what transpires in such pre-trial conferences; the
court may even make reference to the content of the pre-trial minute in
regulating the proceedings or responding to the leading of evidence or
argument. As such, the pre-trial conference should be conducted carefully and
with due preparation. Also, the practitioner must be satisfied as to the
content of the resulting minutes of that pre-trial conference.
A final word on pleadings: a taxpayer's Statement of Grounds
of Appeal should be thorough but not long-winded, crisp but not vague. How one
drafts the pleadings can dictate the passage of proceedings. The pleadings set
the scope of the dispute and inform the nature and extent of the evidence that
must be led and the argument that must follow. It is the first introduction
that the court has to the respective cases being made by the taxpayer and SARS,
and so it should be crafted suitably.
One cannot underestimate the necessity of thorough preparation
for a tax appeal. There can be no excuse for a lack of preparation: the
procedures and the documents that precede the appeal itself lend themselves to
a state of considerable preparedness.
Hence, before entering the courtroom on the first day of the appeal,
the practitioner must have read all of the documents that are tabled in the
dossier and the trial bundle. Clearly, this must involve a full consideration
of the opponent's documents too. A tax appeal is a trial and the practitioner
must be entirely familiar with both the facts of the case and the applicable
law before commencing.
Moreover, the practitioner must know precisely the nature of
the evidence of witnesses that will be led. This means that the practitioner
should already know precisely what the taxpayer's witnesses will say and the
content of the documents to which they will refer. Thorough preparation also
entails an anticipation of how one's own witness might be cross-examined, and
the preparation of those witnesses accordingly before the appeal.
Preparedness might well be epitomised in the argument that
concludes the appeal. To this end, some solid practical guidance (certainly to
a new practitioner) is to present the court and one's opponents with a "pack of
authorities” before commencing argument. The pack of authorities is a file or
bundle of each of the cases being cited as precedent in support of the
practitioner's case. To ensure a maximum of efficiency and a minimum of
frustration, a pack of authorities should be indexed and paginated. In this way
the practitioner can refer the court to particular pages and sections in the
pack quickly and easily. Likewise, the court can refer the practitioner to the
pack when interjecting during argument.
Clearly, the practitioner should be entirely familiar with the
content of the authorities. One should ensure that one has read the entire case
being cited: there can be no greater embarrassment than to cite a section or
phrase in a case only to discover that one has cited a dissenting minority judgment
or that the court was in fact taking issue with the phrase or section quoted.
Cases should also be read in an effort to distinguish them
from the facts of the appeal, where necessary. This can be a very valuable
technique, particularly where it might seem that the precedent is against the
taxpayer. This can also be used to defuse the effect of authorities cited by
Preparedness might also be demonstrated by the practitioner's
ability to engage directly with the court in argument without being buried
behind pages of notes. A technique that I have observed which had considerable
impact was the practice of "arguing off the authorities”. This technique
amplifies the nature and extent of the practitioner's preparation for argument
partly because the pack of authorities must be arranged in such a way as to
present a theme or themes of argument logically and convincingly. When
presenting argument, the practitioner follows the series of cases presented and
highlights the operative parts to the court, drawing attention to any factual
distinctions in the cases where necessary. Engaging the court in this way also
means that the practitioner can observe and respond to the non-verbal reactions
and expressions of the President and assessors, which can enable the
practitioner to pause and address elements that might have caused apparent
concern with the court, or hasten through issues that the court might appear to
regard as self-explanatory or self-evident.
This anecdotal account of one practitioner's novel experience
in the Tax Court neither hopes nor presumes to be definitive. However, if it
helps practitioners in a similarly novel position to remedy some of the
inevitable anxiety that precedes a court appearance, it will have served its
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This article first appeared on the September/October 2015 edition on Tax Talk.